Volodymyr Kvashuk, a former employee who has since been fired from Microsoft, was arrested this week on suspicion of cryptocurrency theft for just over $10 million. It is the American lawyers in the Western District of Washington who suspect the Ukrainian resident of using a Bitcoin mixer to cover his tracks.
Kvashuk was originally in charge of an online sales platform. He was responsible for checking that all purchases were working properly on the platform. However, the protocol set up by the company to block the various purchases only worked for so-called “physical” deliveries, there was a flaw in the purchase of gift cards.
This engineer quickly identified the flaw and exploited it by buying various Bitcoin gift cards with the company’s funds, then reselling them online and recovering the money directly. He would have started by buying a $160,000 Tesla and a beautiful house worth $1.6 million.
To avoid being identified the employee has used a “Bitcoin mixer“, in fact, Bitcoin is not totally anonymous it is possible to determine who is the holder of Bitcoin by going back to the source of it.
The Bitcoin mixer was designed precisely to send the Bitcoins to a third party to mix them with other Bitcoins and then send the same amount of Bitcoin back to the owner, but with you will have understood, other Bitcoins. This makes it much more difficult to trace it. Unfortunately for the employee, the authorities have already understood how this type of Bitcoin mixer works, it is indeed, very practical in theory but unfortunately for him, not very effective in reality.